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Difference between Freelancer, Consultant and Entrepreneur

Key Difference: A Freelancer is someone who is essentially self-employed. He works for an employer for a short time with any long-term commitment. A consultant, on the other hand, is a professional, usually with years of experience in a field. He then works as a consultant in that particular field providing professional or expert advice Entrepreneurs are people who start their own business or company.

There was once a time in the industry when the only norm was a full-time employee. Here a person was hired for a particular job post, served the traditional 9-5 work hours and was paid a salary for the time that he was with the company. However, this scenario is now changing. Instead of the traditional 9-5, people are now more open to non-traditional working structures. Such as freelancing or consulting. In fact, some people choose to forgo working for someone else completely and turn to entrepreneurship instead. So what is the difference between a Freelancer, Consultant and Entrepreneur?

A Freelancer is someone who is essentially self-employed. He works for an employer for a short time with any long-term commitment. A Freelancer may even work for multiple employers at the same time. Freelancers may charge by the day, hour, a piece rate, or on a per-project basis.

The term, freelancer, actually originates from the medieval phrase ‘free lance’ which referred to a free knight that did not have ties to a particular kingdom. This free lance could then be hired by anyone to fight on their behalf.

A consultant, on the other hand, is a professional, usually with years of experience in a field. He then works as a consultant in that particular field providing professional or expert advice. A consultant differs from a freelancer in one major aspect, freelancers offer deliverable, concrete and tangible goods, such as an article, a website design, a piece of music, etc. However, consultants give professional or expert advice, and generally to management.

Additionally, while freelancers usually work from home or a personal office, a consultant goes to the clients’ workplaces, assesses the situation and offers advice on how to improve or streamline, etc.

In contrast, entrepreneurs are completely different. Entrepreneurs are people who start their own business or company. They develop a business model, acquire the human and other required resources, and are fully responsible for the business’s success or failure.

The main difference between freelancer, consultant and entrepreneur is that freelancers and consultants sell themselves; their entire business is depended on themselves, as they are the core of their services. However, entrepreneurs are different. They have formed a business and/or company and once they are sure of the sustainability of the business, they can step back and let the employees manage the business, or sell it off completely for a profit.

Comparison between Freelancer, Consultant and Entrepreneur:

Freelancer

Consultant

Entrepreneur

Definition (Merriam-Webster)

A person who pursues a profession without a long-term commitment to any one employer

A person who gives professional advice or services to companies for a fee

A person who starts a business and is willing to risk loss in order to make money. One who organizes, manages, and assumes the risks of a business or enterprise.

Payment

Freelancers may charge by the day, hour, a piece rate, or on a per-project basis.

Consultant usually charge on a per-project basis. Some may charge by the day or hour.

Earn a share of what their company or product earns.

Types

Independent contractors – the payer has the right to control or direct only the result of the work done by an independent contractor, and not the means and methods of accomplishing the result

On-Call Workers – Workers called to work only as needed, although they can be scheduled to work for several days or weeks in a row

Temporary Help Agency Workers – Workers paid by a temporary help agency, whether or not their job actually was temporary

Workers Provided by Contract Firms –Workers employed by a company that provides them or their services to others under contract and who are usually assigned to only one customer and usually work at the customer’s worksite

Internal consultant - someone who operates within an organization but is available to be consulted on areas of specialism by other departments or individuals

External consultant - someone who is employed externally, either by a firm or some other agency, whose expertise is provided on a temporary basis, usually for a fee. As such this type of consultant generally engages with multiple and changing clients.

Corporate entrepreneurship – starting a company

Social entrepreneurship - pursuing innovative solutions to social problems

Political entrepreneurship – founding of a new political project, group, or political party. Gaining profit through subsidies, protectionism, government contracts, or other such favorable arrangements with government(s) through political influence.

Knowledge entrepreneurship - recognizing or creating an opportunity and take action aimed at realizing an innovative knowledge practice or product.

Benefits

Follow or pursue personal passions

Scheduling freedom

Flexibility

Extra income

Working from home

May need to travel for work

Build up on specialty knowledge

Change in workplace after every job

Status in the workplace

Own boss

Set guidelines for own and other’s work

Decide where the company is headed

Drawbacks

Unsteady income

Lack of job security

No employment benefits such as a pension, sick leave, paid holidays, bonuses or health insurance